Not to poor people, it turns out.
It goes to landlords, doctors, hospitals, agribusiness, the education industry, etc.
We have 130 to 140 different anti-poverty programs. Of these, 25 are different food programs.
The federal government is spending $1 trillion a year; and states and localities spend $700 to $800 billion.
Here is a Michael Tanner C-Span video. Here is Tanner’s FREOPP study.
Here is an article published in the highly respected Journal of Political Economy. Articles in this journal are peer reviewed by some of the top economists in the country. Although the article itself is gated (you can buy it for $30), the conclusion of the study is publicly available…
Notice that this estimate is very similar to the estimate made by John Early, Phil Gramm, and Robert Ekelund in their book, The Myth of American inequality: How Government Biases Policy Debate.
Thomas Piketty (Paris School of Economics), Emmanuel Saez (University of California at Berkeley) and Gabriel Zucman (University of California at Berkeley) – herein after PSZ – in a paper called “Rethinking Capital and Wealth Taxation,” advocate taxing billionaires with a progressive wealth tax.
Here is a nontechnical explanation of the issues at Vox.
The official statistics on poverty are notoriously bad, because they undercount income of people on the bottom of the income ladder.
Correcting for unreported income lowers the rate from an official estimate of 11.4% to 5.3%
A much better way to measure poverty is to focus on how much consumption takes place in poor household.
The official child poverty rate in 2022 was 22%. Correcting for actual household consumption, the rate falls to around 7%Source: University of Chicago professor Bruce Meyer before the House Ways and Means Committee.
A 2012 Congressional Budget Office report looking at the example of Pennsylvania, found that unemployed single taxpayers with one child would face an effective marginal tax rate of 47 percent for taking a minimum wage job in 2012, and if their earnings disqualified them from Medicaid, they could have faced an astonishing marginal tax rate of 95 percent.
This is a potential weakness in all affirmative proposals.
Prior to the War on Poverty (1964), the level of poverty in the US steadily fell as national income rose. However, after the War on Poverty began, the official poverty rate hovered around 13% of the population for the next 60 years.
Writing the Cato journal, James Gwartney and Thomas McCaleb identified four reasons…
We are probably as close to universal health insurance as we are ever likely to be. Yet we are doing a poor job of delivering care to families at the bottom of the income ladder. These families find that as their income goes up and down and as their job opportunities ebb and flow, they bounce back and forth among eligibility for Medicaid, eligibility for subsidized insurance in the Obamacare exchanges, eligibility for employer-provided coverage and sometimes eligible for none of the above. More.
The Piketty-Saez-Zucman estimates show a substantial increase in the share of national income going to the top 1% of income earners. But these estimates ignore government taxes and transfer payments.
Yet a new study finds that the share of after-tax income earned by the top 1% has not changed since the 1960s.
Resolved: The United States federal government should substantially increase fiscal redistribution in the United States by adopting a federal jobs guarantee, expanding Social Security, and/or providing a basic income.